The Black Sheep Business Plan 22 Midlands Highway Campbell Town Tasmania 7210 Prepared By: Jane Chester
1. Executive Summary 1. Business Overview 1.1 Long & Short Term Key Objectives 1.2 Management and Ownership 1.3 Market Analysis 1.4 Market Strategy 1.5 The Competitors 1.6 Business Features 1.7 SWOT Analysis 1.8 Financial Plan Table of Contents 2. Detailed Plan 2.1 Long and Short Term Key Objectives 2.2 Management and Ownership 2.3 Market Analysis 2.4 Marketing Strategy 2.5 The Competitors 2.6 Business Features 2.7 SWOT Analysis 3. Financial Plan 3.1 Financial Allocation 3.2 Financial Review (Including Financial Review Establishment Cost Profit and Loss Cash Flow Balance Sheet Break Even Analysis) 4. Supporting Documentation
1. Executive Summary 1 Business Overview The Black Sheep is a quality restaurant situated centrally along the Midlands Highway, Tasmania s major travel route. Approximately two kilometres out of Campbell Town, The Black Sheep is separated from the inner town rush. The rural based enterprise comprises a scenic outlook on to a peaceful farm and caters for a large range of customers such as families, business people, local travellers, tourists and town s people through the help of the dine-in restaurant and a drive-through food outlet. The dine-in restaurant caters for those wishing for quality service and food in a comfortable setting and sound environment. The drive-through food outlet caters for travellers wishing for fast errorless service and quality food and a short stop time. 1.1 Long & Short Term Key Objectives The business has a number of key objectives intended for the first year such as service and quality. Once the business becomes financially stable, there are many possible future prospects such as a display shearing shed, meeting room and gift shop. 1.2 Management & Ownership The business will be owned in a financially stable partnership and will be strategically managed. 1.3 Market Analysis The Black Sheep has undertaken extensive surveys through the help of various food and cuisine specialists and street surveys. The results showed that majority of people are looking for fast, quality meals and good service. Statistics also show there is a prominent yearly increase in the number of people travelling the Midlands route. 1.4 Market Strategy The Black Sheep s marketing strategy will be to focus on the unique aspects of the business, the quick quality service, location and comfortable seating and outlay. The enterprise has put in place a strategic marketing plan for the business once it has commenced operations and also pre construction. 1.5 The Competitors Through Campbell Town there are three major food complexes that will act as competition to The Black Sheep. These food complexes are Zeps, Banjos and Subway. Each business comprises negative points of which have been scrutinised and acted upon of in the business plan of The Black Sheep. 1.6 Business Features The Black Sheep comprises a number of features that separate it apart from other businesses. Such as location, outdoor setting, appearance, outlay, menu, drive-through food outlet and the customer benefits. 1.7 SWOT Analysis A SWOT analysis has taken place describing the strengths, weaknesses, opportunities and threats facing the business. 1.8 Financial Plan The Financial profits of the business prove to be in the positive throughout the first year and increasing yearly. Graph 1 is a representation of 5 year s projected profit. Through the creation of 5 yearly predicted profit and loss statements it can be observed that overtime the business makes a
great deal of profit, of which increases yearly. By year five the business is making a predicted profit of $183532. Refer to Appendix 2. $ 12000 0 10000 0 8000 0 6000 0 4000 0 2000 0 0 Graph 2: Monthly Predictions of Cash at Bank Year 2010 1 2 3 4 5 6 7 8 9 1 0 Mont h 1 1 1 2 Bank Balance (Beginning of Month ) Receipts Over Payments Payments Over Receipts Bank Balance (End of Month) The cash budget is profitable and bank balance increases monthly. In the beginning of January the bank balance is $25000, by December, the end of the year the figure is $79496.48. Graph 2 is a clear demonstration of how much the bank balance increases monthly within the first year. Refer to Appendix 1.
2. Detailed Plan 2.1 Long and Short Term Key Objectives Short Term The business aim is to provide a quality, accurate, prompt service that is too often not provided by other restaurants alike (refer to 2.5 Competitors). The business aim is also to embrace the rural side of Tasmania, in particular woollen product. This will be achieved through the business appearance, fittings and surround settings. Long Term: - Display shearing shed: There is an existing shearing shed that is located close to the proposed site of the restaurant. The plans are that this shearing shed will be transformed into a display shearing shed, of which, hosting relevant information of the progression of farming and wool. As the display shed is educational, government funds will be accessible and would almost cover all the cost implications of repairing the shed for both safety and visual reasons. The shed will generate revenue through both donations and shearing demonstrations. - Meeting Rooms: Meeting rooms will help bring more business and profit to the business along with helping The Black Sheep to compete with other business rivals. - Gift Shop The gift shop will be an extension to the existing restaurant building and will cater for all customers, though especially foreign tourists. It will stock quality woollen clothing and product branded The Black Sheep of which is 100% Tasmanian Merino wool. 2.2 Management and Ownership Partnership: Frank Chester Josie Chester Jane Chester Director: Jane Chester Jane Chester, Josie Chester and Frank Chester will own The Black Sheep in a partnership agreement. Josie and Frank Chester have experience in the running of a business and are financially stable. They will take no part in the day to day operation of the business though will be key aids in the financial side of the business. Jane Chester will act as the director of the business and will manage the business and its operations. Suppliers: It has been decided that local business Tasmanian Northern Food Distributors will act as the primary food and drink supplier. Northern Food Distributor offers quality food product at an affordable price, with the inclusion of delivery. The prominent bread product supplier will be Campbell Town business, Banjos. Banjos specialises in the production of quality bread. Using Banjos as a supplier would have numerous benefits for The Black Sheep such as daily access to fresh bread. Staffing Arrangements: The staff play a vital role in the running of the business. A strategic selection of staff will take place and chosen staff will be skilfully trained pre construction of The Black Sheep. Staff will have access to a number of staff benefits in order to improve staff service.
To run the business to the standard it wishes to achieve it will require approximately 30 staff members, both full time and part time. The projected level of remuneration to all staff is $658,800 per year. This figure is the maximum remuneration and takes into account such figures of commissions, bonuses and overtime pay. 2.3 Market Analysis As result of conducted tests it was found that on a regular weekday at least 35% of cars stopped for food product. As there are over two million cars travelling the Midlands route, this figure indicates that 1925 cars are stopping per day. The Black Sheep expect to capture 12% of this market. A profile of these stoppers spending habits can be observed in Appendix 6. A survey was carried out to find what people are most likely to use The Black Sheep, results in Graph 3. Another study was taken out in terms of The Black Sheep s drive through food outlet. It was found that people are most likely to use the drive through outlet in the season of winter. A street survey was conducted and it was found that 40% are most likely to use the drive through food outlet in the winter whilst 60% are most likely to use the dine-in restaurant. When people were surveyed on what they would most likely use in the summer season results suggested that only 25% would use the drive through food outlet and 75% would use the dine-in restaurant. Results can be observed in Graph 4.
2.4 Marketing Strategy The following is a list of pre construction marketing strategies that will be carried out before the business is erected: A website will be prepared in order to promote the restaurant and give customers an insight into its advantageous points. Contact and direction details as well as images will be incorporated into the all ages website. The Black Sheep will take advantage of free advertising through the use of MySpace and Facebook. The web pages will include basic information, images and links onto the official Black Sheep website. Print media such as local newspapers, magazines and other various publications will be vital to the promotion of the Black Sheep. Posters advertising the launch of the restaurant will also be released throughout stores and highly populated areas. The cost of advertising posters will be cheap and affordable at $100 through the help of an acquaintance. Once established, The Black Sheep will seek to optimise its prime advantage of location through the help of large quality signage of which can be viewed easily by passing travellers. The signage will cost approximately $10000 through the construction of The Tasmanian Sign Company a renowned, reliable signage company of which delivery is inclusive. 1500 Brochures will be printed through the service of Colour Printing Company CMYK at the cost of $419. The brochures will then be distributed across Tasmania into stores such as family and recreational, hotels, hospitality and travel ventures and heavily populated areas. Another marketing tool will be The Black Sheep s listing in the yellow pages This will cost $200 and will include 1 four by four advertisement clearly stating contact, website and location details. 2.5 The Competitors Zeps is a pizzeria café supplying dine in and takeaway meals, along with drinks and coffee. Zeps is based in the centre of Campbell Town, and does not comprise a private car park. Besides the sidewalk, Zeps has no outdoor dining area and no drive through food outlet. The service is often poor and the menu is rarely altered. Zeps also only offers two toilet to guests, both of which are often unclean. These weaknesses shown by main rival restaurant Zeps have been taken opportunity of in the business plan of The Black Sheep. The Black Sheep boast an ever changing menu with competitive prices and six customer toilets of which are cleaned at regular intervals. Unlike Zeps prices for all food and drink will be clearly labelled to avoid embarrassment. The Black Sheep comprises longer opening hours, opening considerably earlier and staying open later, on both weekdays and weekends. The Black Sheep also accommodate for a larger number of customers comprising 110 seats compared to Zeps maximum 60 seats. Banjos is a well known bakery, that s specialises in bread food product. Banjos cater for a small majority of people and are not extensive in their range of food. Unlike Banjo s the Black Sheep feature a broad menu offering nutritious meals. Subway and Banjos primarily specialise in bread food product which too target only a small majority of customers. The unattractive, commercialised setting out of Subway is taken advantage of in The Black Sheep with a comfortable colour co-ordinated, customer benefiting set out. An advantage for these businesses could be seen as the park, however it is insecure and unsafe especially for young children as its pathway leads straight onto the busy Midlands Highway and inconveniently is on the opposite side of the road from the businesses. These weaknesses shown by these three main rival businesses act as opportunities to the Black Sheep, all of which have been taken advantage of.
2.6 Business Features Location: The Black Sheep is in a prime location for the target market of people travelling the Midlands Route. Being in this location helps the business to stand out and act as a landmark, disconnecting it from the existing mundane blur of businesses. Land is not an issue for the business and offers much opportunity to extending and development. The location is also convenient as it means The Black Sheep is the first stop for those travelling the Midlands from the South. At 200 metres above sea level the land of which The Black Sheep is located upon, is flood resistant. The Outdoor Setting: The Black Sheep will comprise a large outdoor area enclosed by secure fencing and will consist of an outdoor setting for the consumption of food and drink. Appearance: The Black Sheep will comprise a homely, laid back, warm atmosphere, with complimenting music and visual stimulations such as art work decorating the walls and plasma screen televisions. Large quality pine tables and leather seats, couches, benches and stools will be provided to ensure maximum comfort. Outlay: Fast and errorless service will be achieved by the industrious layout of the enterprise. Functionality has chiefly been achieved through order of design. (Refer to Appendix 3-4) The Menu: The Menu will offer a diverse range of foods, catering for customers of all ages. The food is suitable for children and those with dietary needs (glucose free, low cholesterol, low fat). Sanitation standards of food preparation will be exercised by those involved in the handling of food. The drive through food outlet: Will cater for travellers of whom are reluctant to depart from the comfort of their car and are wishing to minimise stop time. Quality food will be produced and sold in this section of the restaurant and to keep the restaurant environmentally friendly recyclable packaging will be utilized. Customer Benefits: Customers will be able to embrace the privacy and comfort of the inside fittings with available wireless internet access and power outlets for the use of laptops and other technological devices. The Name: The enterprise will be entitled The Black Sheep. This name is not only a compliment to the uniqueness and individuality of the enterprise but also establishes the connection between the business and its rural component. As a compliment to this name, the restaurant quite conveniently will be surrounded by paddocks filled with black sheep. This will add to a memorable, unique experience for customers Security: The restaurant will be fitted with the appropriate alarm and locking system, the costs for this can be found in the financial section. There will be no unauthorised access to the premises during closed hours through the use of a night gate and secure surrounding fencing Opening Hours: The Black Sheep will be open for 7 days a week and comprise long business hours, on weekdays opening at 7am and closing at approximately 10pm onwards (depending on business). On weekends the business will open at 8am and close at approximately 11pm onwards. The enterprise will remain closed on Christmas eve, Christmas day, New Years day and Easter Sunday. Automatic Cash Register: An automatic cash register system will help add the functionality of the running of the restaurant. The Automatic Cash Register will allow staff to view waiting time on order which will then allow them to prioritise.
2.7 SWOT Analysis Strengths Staff- well trained Location- Close, Central, Well Signed Outdoor Setting- Unique, Peaceful Service- quick, Accurate, Quality Appearance- Comfortable, Attractive, Colour Co-ordinated, Classical, Modern Menu- Nutritious, Diverse, Changing Price- Competitive, Marked Opening Hours- Longer than all competitors Staff- Professional, Trained, not understaffed Catering- For a large number of people Opportunities Future Prospects Weaknesses Large start up cost- Will require a loan Competitors No Meeting Rooms- Unlike some competitors Out of the Town Threats Competitors New Businesses Financial Plan 3.1 Financial Allocation: Anstie Constructions, a local experienced Tasmanian building team have been chosen to perform the construction of The Black Sheep. Anstie Constructions will ensure the restaurant will be underway at its proposed date of 2 nd January 2010. 3.2 Financial Review To start up The Black Sheep will require a total of $714450 (View Graph 5, Appendix 5) $300000 of capital will be contributed by the owners in partnership. Three other sources have been looked to and a loan sum of $300000 from these three sources has been determined. These financial sources are reliable and will offer flexible repayments and minimum interest expenses. A strategy that has been set in place to reduce the cost of starting up the business is to loan expensive equipment such as televisions, ovens and heat pumps. This leasing strategy allows for the cost figure of setting up the business to be decreased by $74000 (refer to Appendix 5) An extra $134450 will be required and obtained via a bank loan. The Black Sheep will repay the loan over five year period. The loan will comprise a 9% effective interest rate and monthly repayments will be $2790.96. Other loans of $300000 obtained via acquaintance investors will be paid back gradually over a 20 year period. Figures for monthly estimated sales have been obtained by estimating the amount of people stopping on the Midlands highway per day. The Black Sheep expect to obtain 12% of this market of stoppers. It was then estimated how much the stopping customers would purchase, they were categorised into three spending brackets which helped determine the daily predicted profit. Through
the observation of 2010 calendar the amount of weekdays, holidays and weekends were determined. Percentages of stoppers and customers and their spending habits varied depending on these dates in the 2010 calendar (Appendix 6). Graph 6 shows the estimated cash sales in each month of the first year of business. Graph 7 shows the expected percentage of monthly revenues obtained from particular dates. No credit will be offered in order to avoid slow cash flow and extra debt collection work, however once the business is in operation and making a considerable profit the option will be considered.
Appendix 1 CASH BUDGET *Resultant cash at bank figures can be seen at bottom of page Cash Budget YEAR 1-2010 The Black Sheep January Febuary March April May June July August September October November December Expected Receipts Cash Sales 96450 87660 91575 89580 96600 94680 93345 92850 94395 94125 92775 92475 Total Expected Receipts 96450 87660 91575 89580 96600 94680 93345 92850 94395 94125 92775 92475 Expected Payments Drawings 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 Maintanance Expense 350 350 350 350 350 350 350 350 350 350 350 350 Advertising Expense 400 200 400 100 300 200 200 100 100 200 200 100 Loan Repayments 2790.96 2790.96 2790.96 2790.96 2790.96 2790.96 2790.96 2790.96 2790.96 2790.96 2790.96 2790.96 Flexi Rent Expense (Based on 10%) 617 617 617 617 617 617 617 617 617 617 617 613 Electicity Expense 750 750 750 750 750 750 750 750 750 750 750 750 Water Expense 650 650 650 650 650 650 650 650 650 650 650 650 Petrol Expense 125 125 125 125 125 125 125 125 125 125 125 125 Broadband Expense 89 89 89 89 89 89 89 89 89 89 89 89 Phone/fax Expenses 184 184 184 184 184 184 184 184 184 184 184 184 Wages Expense 57500 52000 54000 53000 56800 55500 55000 54500 55000 55500 55000 55000 Stock (20% of Cash Sales) 21915 18315 17916 19320 18936 18669 18570 18879 18825 18555 18495 GST 9645 8766 9157.5 8958 9660 9468 9334.5 9285 9439.5 9412.5 9277.5 9247.5 Total Expected Payments 74600.96 89936.96 88928.46 87029.96 93135.96 91159.96 90259.46 89510.96 90474.46 90993.46 90088.46 89894.46 Bank Balance (Beginning of Month) 25000 46849.04 44572.08 47218.62 49768.66 53232.7 56752.74 59838.28 63177.32 67097.86 70229.4 72915.94 Receipts Over Payments 21849.04-2276.96 2646.54 2550.04 3464.04 3520.04 3085.54 3339.04 3920.54 3131.54 2686.54 2580.54 Payments Over Receipts Bank Balance (End of Month) 46849.04 44572.08 47218.62 49768.66 53232.7 56752.74 59838.28 63177.32 67097.86 70229.4 72915.94 75496.48
Appendix 2 PROJECTED PROFIT & LOSS STATEMENTS 5 YEARS Predicted Profit & Loss Statement For Period Ended 30 December 2010 Sales 1116510 less COGS 223302 893208 Less Expenses Maintenance Expense 4200 Advertising Expense 2500 Loan 33492 Flexirent Expense 7400 Electricity Expense 9000 Water Expense 7800 Petrol Expense 1500 Broadband Expense 1068 Phone/Fax Expense 2208 Wages Expense 658800 GST 111651 Depreciation on Building 15000 854619 Total Profit/Loss 38589 Predicted Profit & Loss Statement For Period Ended 30 December 2011 Sales 1200000 less COGS 240000 960000 Less Expenses Maintenance Expense 5000 Advertising Expense 4000 Loan 33492 Flexirent Expense 8000 Electricity Expense 10000 Water Expense 8000 Petrol Expense 2000 Broadband Expense 1068 Phone/Fax Expense 2208 Wages Expense 670000 GST 120000 Depreciation on Building 15000 878768 Total Profit/Loss 81232
The Counter Drive Through Food Outlet Road Appendi x 3
Appendix 4
Appendix 5 1.1 Expected Start Up Business Costs QUANTITY $ Construction 70000 Construction Materials 300000 Walls Roof Windows Doors Insulation Wood Paint Floor Lighting & Eletrical Connections 15000 Water Connections 20000 INSIDE FITTINGS Takeaway Food Outlet Section Bench/Cupboards 15000 Shelves 2000 Serving Area Bench 30000 Shelves 1500 Signage 300 Dine-in Kitchen Fittings: Bench/Cupboards 15000 Sink 1000 Shelves 1500 Bathroom fittings Mirror 2 3000 Soap Dispenser 2 400 Sink 6 4000 Toilets 6 4000 Dryer 2 800 Bench 2 4000 Security Fittings Locks 3000 Alarm System 2000 Fire Alarm 4 200 OUTSIDE FITTINGS Pathway 200 Road and Parking 80000 Plants & Grass 1000 Fencing 1000 Signage 10000 LEGAL Permits 20000 Licences 20000 Insurance 15000
EQUIPMENT Indoor Tables 25 15000 Indoor Chairs 110 15000 Outdoor Setting 4000 Cutlery 1800 Plates 5000 Glasses 2000 Microwave 4 1600 Utensils 800 Phone 500 kettle/urn 800 Coffee Grinder 400 Washing Up Equipment 100 Food Containers 500 MISCELLANEOUS Mirrors 2000 Paintings/Photographs 100 Staff training/ Employment 2000 Start Up Price For Stock 12150 Sound System 7000 Menu Printing 1600 Stationary 200 Cash 20000 Advertising 2000 START UP COST 734450 1.2 Flexi Rent Items & Costing *Expected 10% Interst Payments Per Year (Refer To Cash Budget) Computer 5000 Televisions 3000 Cash Register 14000 Oven 2 20000 Coffee Machine 3 9000 Dish Washer 5000 Fridge/Freezer 9000 Heat Pump 2 9000 74000 Flexi Rent Interest Per Year 7400
Appendix 6 Calculations of Monthly Incomes from Sales *According to statistics over two million cars travel the Midlands Highway per year, the following calculations relate to this figure. Week Day Calculations APPROX TRAVELLERS (per day) 5500 STOP TRAVELLERS (per day) 35% 1925 BLACK SHEEP STOPPERES 12% 231 Estimated purchases of COFFEE $3 90 270 SNACK AND COFFEE $12 90 1080 MEALS $25 51 1275 PREDICTED PROFIT PER DAY 2625 Month Number of Weekdays Projected Profit JAN- 31 DAYS 10 WEEKDAYS 26250 FEB-28 DAYS 12 WEEKDAYS 31500 MAR- 31 DAYS 23 WEEKDAYS 60375 APR- 30 DAYS 16 WEEKDAYS 42000 MAY- 31 DAYS 16 WEEKDAYS 42000 JUN- 30 DAYS 12 WEEKDAYS 31500 JUL- 31 DAYS 21 WEEKDAYS 55125 AUG- 31 DAYS 22 WEEKDAYS 57750 SEP- 30 DAYS 11 WEEKDAYS 28875 OCT- 31 DAYS 21 WEEKDAYS 55125 NOV- 30 DAYS 19 WEEKDAYS 49875 DEC- 31 DAYS 7 WEEKDAYS 18375 School Holiday Calculations APPROX TRAVELLERS (per day) 5750 STOP TRAVELLERS (per day) 40% 2300 BLACK SHEEP STOPPERS 12% 276 Estimated purchases of COFFEES $3 108 324 SNACK AND COFFEE $12 108 1296 MEALS $25 60 1500 PREDICTED PROFIT PER DAY 3120 Month Number of Holidays Projected Profit JAN- 31 DAYS 10 SCHOOL HOLIDAYS 31200 FEB-28 DAYS 8 SCHOOL HOLIDAYS 24960 MAR- 31 DAYS APR- 30 DAYS 4 SCHOOL HOLIDAYS 12480 MAY- 31 DAYS 5 SCHOOL HOLIDAYS 15600 JUN- 30 DAYS 9 SCHOOL HOLIDAYS 28080 JUL- 31 DAYS 1 SCHOOL HOLIDAY 3120 AUG- 31 DAYS SEP- 30 DAYS 11 SCHOOL HOLIDAYS 34320 OCT- 31 DAYS NOV- 30 DAYS DEC- 31 DAYS 15 SCHOOL HOLIDAYS 46800 Weekend & Public Holiday Calculations
APPROX TRAVELLERS (per day) 6000 STOP TRAVELLERS (per day) 45% 2700 BLACK SHEEP STOPPERS 12% 324 Estimated purchases of COFFEES $3 120 360 SNACKS AND COFFEE $12 120 1440 MEALS $25 84 2100 PREDICTED PROFIT PER DAY 3900 Month Number of Weekends/Public Holidays Projected Profit JAN- 31 DAYS 10 WEEKEND/PUBLIC DAYS 39000 FEB-28 DAYS 8 WEEKEND/PUBLIC DAYS 31200 MAR- 31 DAYS 8 WEEKEND/PUBLIC DAYS 31200 APR- 30 DAYS 9 WEEKEND/PUBLIC DAYS 35100 MAY- 31 DAYS 10 WEEKEND/PUBLIC DAYS 39000 JUN- 30 DAYS 9 WEEKEND/PUBLIC DAYS 35100 JUL- 31 DAYS 9 WEEKEND/PUBLIC DAYS 35100 AUG- 31 DAYS 9 WEEKEND/PUBLIC DAYS 35100 SEP- 30 DAYS 8 WEEKEND/PUBLIC DAYS 31200 OCT- 31 DAYS 10 WEEKEND/PUBLIC DAYS 39000 NOV- 30 DAYS 11 WEEKEND/PUBLIC DAYS 42900 DEC- 31 DAYS 7 WEEKEND/PUBLIC DAYS 27300 *Calculations do not include New Years day (January), Easter Sunday (April) or Christmas Eve and Day (December) as on these dates The Black Sheep will be closed. In total the figures account for 361 days of year 2010. Month Total Monthly Profits $ JAN- 31 DAYS 96450 FEB-28 DAYS 87660 MAR- 31 DAYS 91575 APR- 30 DAYS 89580 MAY- 31 DAYS 96600 JUN- 30 DAYS 94680 JUL- 31 DAYS 93345 AUG- 31 DAYS 92850 SEP- 30 DAYS 94395 OCT- 31 DAYS 94125 NOV- 30 DAYS 92775 DEC- 31 DAYS 92475